Financial Crime World

Law Firms Must Comply with Anti-Money Laundering and Terrorist Financing Regulations

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Bermuda’s Anti-Money Laundering (AML) and Counter-Terrorist Financing (CFT) Regulations

Hamilton, Bermuda - In an effort to prevent money laundering and terrorist financing, law firms operating in Bermuda are required to comply with the country’s anti-money laundering (AML) and counter-terrorist financing (CFT) regulations. The Bermuda Monetary Authority (BMA) has issued new guidance notes outlining the requirements for lawyers.

Requirements for Law Firms

Lawyers must establish and maintain appropriate policies and procedures to prevent and detect money laundering and terrorist financing. These regulations apply not only to law firms that engage in regulated activities, but also to those that do not, as the BMA has powers to enforce compliance.

Here are some key requirements:

  • Establish policies and procedures for:
    • Customer due diligence measures
    • Ongoing monitoring
    • Reporting
    • Recordkeeping
    • Internal control
    • Risk assessment and management
    • Communication
  • Perform and document risk assessments prior to introducing new products, practices or technologies
  • Report suspicious transactions to the Financial Intelligence Agency (FIA)
  • Ensure employees are adequately screened when initially employed

Consequences of Non-Compliance

The penalties for non-compliance with the AML/ATF regulations are severe:

  • Civil penalties of up to $250,000
  • Publication of the decision to impose the penalty
  • In some cases, failure to comply can also result in criminal charges

Guidance from the BMA

Each case will be decided on its own facts, and firms must form their own views based on their specific circumstances. However, the authority has made it clear that compliance with the regulations is non-negotiable.

Conclusion

Lawyers operating in Bermuda are advised to review the guidance notes carefully and implement the necessary policies and procedures to ensure compliance with the AML/ATF regulations. Failure to do so could result in serious consequences for individuals and firms alike.